Here's How Much Investing $1,000 In IBM At Dot-Com Bubble Peak Would Be Worth Today

Despite an ongoing pandemic and the U.S. economy barely limping along, the Nasdaq is still trading more than 50% above its March lows. The surge in tech stocks in 2020 has understandably led investors to draw comparisons to the dot-com bubble in 2000.

The Nasdaq ultimately peaked at 5,048.62 on March 10, 2000. Of course, some dot-com bubble stocks have performed much better than others in the 20 years since the bubble burst.

IBM’s Past 20 Years: Without a doubt, enterprise hardware and software stock IBM IBM had major difficulty returning to its dot-com bubble levels.

IBM was founded back in 1911, nearly 90 years before the dot-com bubble. The company was a PC powerhouse in the 1980s, but early IBM investors likely never could have foreseen the rise of the internet, smartphones, cloud computing and many of the other dynamics that have propelled a major shift in IBM’s business over the past 20 years.

IBM has been slowly transitioning its business from PCs to cloud computing and artificial intelligence. IBM reached a peak dot-com era market cap of $215 billion during the peak of the dot-com bubble.

See Also: Here's How Much Investing $1,000 In Intel At Dot-Com Bubble Peak Would Be Worth Today

Dot-Com Bubble Fallout: IBM’s high watermark of the dot-com bubble was $246 back in 1999 prior to a two-to-one stock split in May of that year. When the bubble burst, IBM held up relatively well at first, dropping 5% in the year following the Nasdaq top compared to a 59.3% overall decline for the index. Unfortunately, when the Nasdaq stabilized, IBM shares continued to struggle.

IBM’s share price hit $54.01 in late 2002 before rebounding to its split-adjusted dot-com bubble high of $123 in mid-2008. IBM hit its pre-financial crisis high of $130.93 in late 2008. During the sell-off in 2009, IBM shares dropped as low as $69.50. IBM was back making new highs above $140 by late 2010. The stock ultimately made it as high as $213.90 in early 2013 before the company’s legacy PC business really started to weigh down the stock.

IBM drifted steadily lower in the past seven years, dropping as low as $105.94 in 2018 as the company reported consistently negative revenue growth. IBM fell as low as $90.56 in March 2020 during the COVID-19 sell-off before rebounding to around $123 today.

IBM will forever be known as one of the quintessential dot-com bubble stocks given its market cap peaked at more than $20 billion. The good news for IBM investors who bought at the height of the bubble is that the stock’s dividends alone have helped investors turn a profit in the past two decades.

In fact, $1,000 invested in IBM stock at the dot-com bubble peak would be worth about $1,804 today, assuming reinvested dividends.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: EducationTechGeneral
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!